5 Best Performing Dividend Yield Stocks
Marshall Hargrave: The stock market has been disappointing so far this year. Nearly all the major indices are flat.
Dividend stocks have been a great place to seek refuge from the poorly performing market. There are a number of companies paying a dividend yield that’s more than the 10-year Treasury note yield. But there are only a few that are also outperforming the market. Investors shouldn’t have to sacrifice capital gains for dividends.
The financial crisis forced many companies to become more innovative with growing their businesses. This includes dividend paying companies. There is still upside for companies that can innovate and successfully enter new markets.
Today I’ll present five stocks that will continue rewarding shareholders. Not only with their dividend yields, but also with capital gains.
5 Dividend Stocks That Are Set To Continue Outperforming The Market
Kimberly-Clark (NYSE: KMB)
Kimberly-Clark isn’t the most obvious name when investing in consumer products. Most investors think of Procter & Gamble (NYSE: PG) or Johnson & Johnson (NYSE: JNJ).
However, Kimberly-Clark is an industry leader across a number of categories, including personal care products, paper goods and diapers. A few of its key brands include Depends, Kotex, Cottonelle and Huggies.
Its dividend yield is 3%, which is above both P&G and Johnson & Johnson. The company has increased its annual dividend payment for 41 consecutive years.
Kimberly-Clark also has a strong international presence. This is one area where it can grow its business. This year it’ll launch product upgrades for diapers and personal care products across Brazil, Russia and China. And later this year it’ll spin-off its healthcare business and focus solely on its consumer and professional brands.
Reynolds American (NYSE: RAI)
It’s tough to find an industry that offers dividend yields as impressive as the tobacco industry. Reynolds American pays a 5% dividend yield and the industry average dividend yield is an impressive 3.2%.
Reynolds American not only offers a high dividend yield, but it has been outperforming the market on a multi-year basis. This should continue as Reynolds American continues to innovate. It’s set to launch new mint flavors for its Camel brand and will increase marketing of its natural brand, Natural American Spirit.
One of the hottest areas of the tobacco market is e-cigarettes. Annual e-cigarette sales could outpace traditional cigarette sales within a decade. Reynolds is well positioned in this market. It has developed its own patented vapor technology, used in its e-cigarette brand Vuse.
Its potential acquisition of other major tobacco company, Lorillard (NYSE: LO), is another big positive. It would make the combined company a powerhouse in the e-cigarette space.